Why Germany and not Japan is the leader in renewable energy

Why have Germany and Japan, two large, and in many respects similar developed democracies pursued different energy options? A recently published study examines why Germany has become the world’s leader in renewable energy while phasing out its nuclear power and Japan has deployed only a trivial amount of renewables while constructing a record number of nuclear reactors.

The widespread story is that Germany rejected nuclear power in a politically bold move after Fukushima and instead pursued ‘Energiewende’ prioritizing wind and solar energy to combat climate change. Leading scholars such as Amory Lovins described Japanese policymakers as manipulated by the nuclear lobby, clinging to their old ways, and unwilling to properly support renewable energy. The lesson to other countries is that public anti-nuclear sentiments and a capable democratic government is what it takes to turn to decentralized renewable energy.

This research shows that these stories are myths. As I and my coauthor wrote in a letter to the editor in Nature last year, Japan had ambitious renewable targets already before Fukushima and there is no evidence that these have been affected by its nuclear plans. The same holds for Germany: its targets for renewable energy were not affected by the change in its nuclear strategy following Fukushima’s disaster in 2011.

In fact, the differences between Germany and Japan started not in 2011 after Fukushima, but some 20 years earlier in the early 1990s when Japan’s electricity consumption was rapidly growing and it desperately needed to expand electricity generation to feed demand that could not be matched with very scarce domestic fossil fuels. Furthermore, Japan was developing ‘energy angst’ related not only to its high dependence on Middle Eastern oil and gas but also to potential competition with China’s with its rising appetite for energy. At the same time, Germany’s electricity consumption stagnated in the 1990s and its energy security improved following the end of the Cold War. Germany was also one of the world’s largest coal producers and could in principle supply all its domestic electricity from coal. As a result, in the 1990s, Japan was forced to build nuclear power plants, but Germany could easily do without them.

There was another important development in the early 1990s: wind power technology diffused to Germany from neighboring Denmark. This was triggered by an electricity feed-in-law of 1990s, which obliged German electric utilities to buy electricity from small producers at close-to-retail prices. The law, which aimed to benefit a small number of micro-hydro plant owners, unexpectedly led to almost a 100-fold rise in wind installations in Germany. Although still insignificant in terms of electricity, this development created a large and vocal lobby of owners and manufacturers of wind turbines. In the early 2000s, the wind sector provided less than one-tenth of nuclear electricity but had more jobs than in the nuclear sector. In contrast, Japan’s similar policies of buying wind energy from decentralized producers did not result in any considerable growth of wind power, because the Danish technologies prevalent in the early 1990s could not be as easily diffused to Japan.

By the turn of the century, the electricity sectors in Germany and Japan still looked largely similar, but the political dynamics could not be more different. In Germany, a huge politically-powerful coal sector was represented by Socio-Democratic Party and the so-called ‘red-green’ coalition was formed with the Green party, who represented the rapidly growing wind power sector. The stagnating nuclear industry, however, had not seen new domestic orders or construction for 15 years and large industrial players like Siemens had begun to diversify away from it. All this was in the context of a positive energy security outlook and declining electricity prices. In contrast, in Japan, the nuclear sector had vigorously grown over the last decade and was becoming globally dominant by acquiring significant manufacturing capacities. Nuclear power was the only plausible response to the energy angst and it lacked any credible political opponents: the domestic coal sector in Japan virtually did not exist (Germany had around 70,000 coal mining jobs, Japan – about 1,000) and wind had never taken off.

The results of these very different political dynamics were predictably different: the red-green coalition in Germany legislated nuclear phase-out in 2002 and unprecedented financial support for renewables in 2000, while retaining coal subsidies and triggering construction of new coal power plants. Japan continued to support solar energy in which it had been the global leader since the 1970s but it also adopted a plan for constructing many more nuclear reactors designed to substitute imported fuels. Fukushima, rather than highlighting differences actually made the energy trajectories of two countries more similar as both countries began to struggle to replace their aging nuclear capacities with new renewables.

How does this story relate to wider questions such as: why are some countries more successful in deploying renewables than others? The answer is not in ‘stronger political will’ and in the strength of climate change concerns, but in economy, geography, and the structure of energy systems. Political wins for renewables and the climate can also be the result of dubious political compromises such as the alliance with the coal lobby in Germany, which led to the rapid growth of renewables and demise of nuclear power. It may be particularly difficult for countries with fossil fuel resources to implement renewable energy policies if they lead to the contraction of domestic coal, gas or oil industries.